PostNL N.V.

Thank you, and good morning, everyone. We are here with, Hendrika Verhagen; our CEO; and Pim Berendsen; our CFO to talk you through the press release that we have issued this morning regarding the first quarter results in 2022.

Pim will open up with the slides and after that we will follow-up with Q&A. Pim, over to you please.

Yes. Thank you, Jochem, and welcome to all of you.

Thanks for joining us today. Let's start with our key takeaways.

Well, certainly, the war in Ukraine remains deeply concerning, severely impacting millions of people and bringing additional uncertainty to the overall global economic markets. We do see impact on consumer spending.

We also seem to see a shift towards services a bit away from products, increasing inflation, which leads to higher costs. Supply chain issues remained.

And due to the zero COVID policies in China, there are new lockdowns. These developments have and certainly will impact PostNL, not only in the first quarter of this year, but also going forward.

On the picture of this slide, you see that a number of trucks drove to the border of the Ukraine to deliver necessary goods like food, hygiene products and child care articles to the Red Cross. These goods were donated by our customers, our partners and also by our own people.

Also, EC Mila, our colleague from Ukraine, who on behalf of PostNL handed over a 0.5 million check towards Hero555. Now, if we look at our Q1 performance, we've reported a €33 million normalized EBIT and a €52 million free cash flow; given the circumstances, solid results.

The first 2 months of the year were completely in line with our expectations. But since late February, early March, we experienced the effects of the more challenging market environment, putting pressure on cost levels and e-commerce volumes.

Overall, parcel volumes were down 19.5%, approximately 4% more down than our expectations. Obviously, the big step down relates to less nonrecurring volumes compared to 2021 when we saw a record quarter level of 108 million parcels.

The decline was also due to development in cross-border activities. If we adjust for this, we see solid growth of around 11% of our domestic volumes.

But here, we also see the slowdown since late February. Mail was in line with expectations.

We do see a continuation of substitution, but at the same time, good results in the Mail division. While the situation brings additional uncertainty, we keep executing on our strategy with strong cash flow performance of €52 million.

And we are progressing on our ESG as well as our digitalization programs. If we then move to the next slide, we see the Q1 performance on the key value drivers.

Revenue came in at €806 million, which is 16% below. There's a few important elements to note for this comparison.

Large part of this step down in revenue is prominently as a consequence of the lower nonrecurring volume. Next to that, and that's also what we talked about before.

The first part of 2021, Q1 and Q2 had very high volume and revenues from cross-border. And due to the changes in [election] that has partially been reversed.

Next to that, we still ambitious supply chain disruptions because of the zero COVID policies in China. Last year, we also sold Senders customer contract that in that year in that quarter contributed €14 million to revenues.

Normalized EBIT came in at €33 million, with only a very limited impact assumed to be nonrecurring and related to COVID-19 this year, where last year, we saw a plus of €42 million. As expected, around €15 million minus impact on normalized EBIT from cross-border activities resulting from a change in tax regulation for small non-EU goods and other regulation in China, together with the global supply chain issues we just talked about.

Compared to last year, we also saw our organic cost increase by €21 million, reflecting regular labor cost increases, higher cost of delivery partners and a spike in fuel costs. The €21 million is approximately €2 million more than we anticipated at the beginning of the year.

As said, despite the decrease compared to last year, free cash flow was strong. Also in this quarter, we started the execution of our share buyback program.

By the end of the first quarter, we've repurchased 6.6 million shares. And last week, Monday, we were at roughly 24 million shares for approximately €79 million, so a good progress has been made on the buyback program.

Then, before we go into the business developments and more detailed financial performances, I would like to spend a few words on our strategic business drivers. As said, we are continuing to execute on our strategy.

And we keep focusing on providing our customers on excellent experience and making our organization more sustainable, building on our strong financial position. On Slide 5, you see our value creation model that we've discussed a couple of times before.

And it's important to briefly touch up on this once more. And our ambition is clear.

We want to be the leading logistics and postal solution provider in, to and from the Benelux. And to live up to that ambition, we have defined 3 clearly defined value creation propositions.

Parcels will manage for profitable growth. Mail will manage for value.

Digital Next, our third proposition is aimed to strengthen our competitive position by further building on our platform and connecting customers, consumers and solutions through simple and smaller digital solutions. For these propositions, we've defined clear strategic objectives, which you can find on the left.

We've set ambitious targets to improve our environmental footprint. And last but not least, we intend to generate profitable growth and sustainable cash flow.

If we then move to Slide 6, then clearly, ESG is, of course, part of this strategy. It's our license to operate.

And we focus on all 3 factors of ESG and have embedded these fully in our strategy. We aim to improve our environmental impact and deliver all parcels and letters in the Benelux emission free in the last mile by 2030.

In the first quarter of this year, we further reduced our environmental footprint by increasing our carbon efficiency by 15%. Clearly and not any doubt, our people are a key factor in our success.

Negotiations on the new collective labor agreement for our postal deliveries are well underway. And we should anticipate conclusions there in relatively short term.

We also aim to be a solid and socially responsible partner and work with highly satisfied delivery partners and deliverers in a compliant and sustainable way. We applied sound and social labor practices that comply with the relevant legal framework and are in line with common practice, both in the transport sector as well as in the broader economy.

A few words on Belgium, on the next slide. In Belgium, it's important to note that we work with 220 delivery partners that they employ around 1,500 deliverers.

The vast majority of those work on fixed employment contracts under collective labor agreements with safe and compliant working conditions. 93% of the delivery partners we work with in Belgium are satisfied to very satisfied with the cooperation with PostNL.

We use strict controls and apply the legal framework that is used in many sectors in Belgium, for example, also for the Port of Antwerp as a basis of the way we work. We already had strict controls in place and tightened these even further after the first allegations came in.

We currently do 100% check at the gate every morning. As such, we do not recognize ourselves completely in the allegations.

All the checks have been carried out and they do not substantiate those either. We stand behind our people in Belgium without a doubt.

And these are surely not easy times for us and for them. We have confidence in the legal process and in the independent investigations that currently being done.

In the meantime, all our locations are open, parcels are being delivered every day, and we support our people as much as possible. From ESG towards the acceleration of our digital transformation, as you know, within our Digital Next program, we will further digitalize our commercial engine, transform our core logistics, scale our platforms provide new business.

Progress is well underway, which is very nice for us is that we've recently been named #4 in the digital transformation leader in the digital space cloud and the University of Amsterdam, for sure something that we're proud of. On Slide 9, you find the progress on our key digital value drivers.

I'm not going to spend too much time on them. We are happy with the progress we are making and it'll be interesting to note is that we've introduced a new algorithm that will optimize the packaging of products and as such take out air in packaging around 20%.

We're deploying this algorithm right now and our own fulfillment activities seek to improve it and as such also contribute to our carbon emission ambitions. Now, let's look into our business developments and financial performance in a little bit more detail.

On Slide 11, you'll find the bridge of the normalized EBIT comparison Q1 2021 towards 2022. At a reconciliation of €130 million result last year and €33 million in this quarter.

Here, you see that the nonrecurring impact of COVID had a negative impact of €41 million this quarter. This quarter, the impact in Parcels was negative €2 million compared with a positive €24 million last year.

And Mail also the comparison shows a negative compared to last year €3 million positive this quarter compared to €18 million last year so a delta of €15 million. The negative impact in Parcels is mainly driven by the almost no nonrecurring volumes in 2022, while at Mail in the Netherlands, the impact is mainly driven by a negative mix as last year, so a lot of single and e-commerce items.

This brings us to a remaining negative €56 million in business development in the first quarter. This business development cleaned for nonrecurring COVID impact reflects a couple of items that I already touched upon and which I would further highlight.

Although, our direct exposure to fuel cost is limited, it does have a material impact on results. In Q1, we see a €21 million organic cost increase, which also includes labor costs.

And this is €2 million more than we anticipated. Then, come back in our segments, Parcels and Mail in the Netherlands in more detail when I go to those slides.

It also includes higher cost for expansion of capacity, Digital Next and higher IFRS expenses as expected and as indicated before. The development of our cross-border activities as a result of change in regulation of the value-added tax in comparison with the strong quarter of last year is another argument.

So here, we see a negative impact both at Parcels and Mail. While we believe the overall effect is partially temporarily, recovery will be impacted by the new lockdowns in China.

If we go to the Parcels segment, at Parcels, we've reported revenue of €554 million in comparison to €662 million last year. Normalized EBIT came in at €18 million compared to €92 million.

This basically reflects a negative €26 million related to nonrecurring COVID and €48 million less driven by other business and operational effects. The most important ones relate to a step-down in volume and higher organic costs.

The volume declined by 19.5% and reflecting lower nonrecurring items. We kept the market share stable.

And if we look at the volume development, excluding the nonrecurring COVID impact, we see a growth of approximately 4%. If we then subsequently exclude our international volumes, we saw a domestic growth of 11% for the quarter and clearly March was there significantly more negative than January and February.

So growth in e-commerce-related volumes continued and as said a slowdown was visible as of the start of the war in Ukraine. Revenue at spring was down, while logistics stayed relatively stable.

This is partly related to nonrecurring COVID and at spring, of course, due to the cross-border developments compared to strong last year. As a result of the lower volumes, we do some temporarily -- we do see some temporary underutilization of capacity in the first quarter.

This, we are counterbalancing by our scaling operations down with actual volume development with the aim to keep direct cost per parcel stable. If we then look at the Q1 '22 normalized EBIT Bridge for Parcels, you see the €92 million compared with the €18 million.

There is a volume effect of €87 million, largely balanced by €48 million of lower volume dependent costs, as we are scaling down operations to align with lower volumes. A large increase in organic cost of €16 million, reflecting regular labor cost increases and higher cost for delivery parcels, but certainly also a significant increase in vehicle.

Despite that we are seeing right now, have materially impacted quarterly results. In March, we've given our delivery partners a onetime compensation for this spike and those costs have been included in this bucket.

Higher network costs mainly related to new capacity and temporarily underutilization of our networks has been balanced by various other cost impacts. Last year, for example, we paid around €10 million additional fees to retailers to keep their shops open and during the lockdown, whereas this year, lockdown and therefore our compensation ended in January.

The bucket of our result was negative as well, reflecting, amongst others, a negative result at spring as a result of the cross-border development and lower nonrecurring COVID impact and very strong performance in Q1 last year, both at spring and logistics. Let's move over to Mail, at Mail, in the Netherlands, we report €387 million in comparison to €463 million.

Normalized EBIT came in at €36 million in comparison to €59 million last year. This basically reflects a negative minus €15 million related to nonrecurring COVID and €8 million less driven by other business effects; in our opinion, a solid quarter for Mail.

Substitution continued at 7.4%. Some prices were unchanged in 2022.

In Q1 of this year, we see a negative development in our mix, which is mainly the result of the single and e-commerce items last year that were largely related to COVID and the nonrecurring. As always, but now even more than in normal times, we keep a close eye on our cost.

In Q1, we realized additional cost savings by increasing efficiency and amongst others, our collection in sorting processes. More detail on that reconciliation can be found on Slide 15, a decrease of €23 million or €8 million when correcting for nonrecurring COVID.

The results over the quarter reflects €22 million negative volume impact, negative price/mix of 9% organic cost increases of 5%, partly balanced by lower volume dependent costs and other costs. The latter is a result of the additional cost savings and improvements in other costs amongst the positive impact from bilateral.

Now, moving to our cash flow performance; a negative development compared with Q1 last year. However, still a very strong performance for the quarter.

Last year's cash flow included proceeds from the sale of Sandd of €44 million with the book profit was included within the normalizations and the proceeds at the lower end of the bridge. For Q1 this year, we see additional investments in the acceleration for the stabilization and expansion of capacity with the level being scaled down of the remainder of the year to adjust this in line with volume projections.

Also, we see a favorable working capital development that we already saw by the end of last year and somehow expected it to be reversing. We managed to keep it at a very solid level.

A little bit of that will be phasing but still happy with the free cash flow performance for the quarter. In line with our capital allocation model, we've announced the share buyback program.

As I said, by now, we've approximately repurchased 24 million shares. Every Tuesday morning, we published an update of the program and the additional cash out in relation to this, roughly €79 million of already repurchased shares will be visible over the next months in our cash flow statements.

You know that we financed the share buyback program by using the cash of our balance sheet, which then brings me to the balance sheet. Here, you see the key components of the balance sheet and the development of the adjusted net debt from €203 million net debt by the end of the year to €188 million at the end of the quarter.

So still a very strong balance sheet, both in terms of equity and a leverage ratio well below 2. In Q2, we take into account that our adjusted net debt position will be impacted by the progress of our share buyback program and the payout of the final dividend over 2021, which will then impact materially our adjusted net debt position by the end of the next quarter.

Then let's go to the expectations for the full year of 2022. At the presentation of our Q4 and full year 2021 numbers on the 28th of February, we expect the normalized EBIT in the range of €210 million to €240 million compared with €226 million normalized EBIT corrected for nonrecurring COVID impact in 2021.

Free cash flow of €110 million to €140 million, with normalized comprehensive income of around €200 million. Unfortunately, the world looks different today.

And it's going to be a year that's going to be more challenging than earlier anticipated. World has changed since then, we see the ongoing war in Ukraine increasing inflationary pressure and new lockdowns in China.

Although the direct impact of the war is very limited, we, as many other companies do, experience impact through the macroeconomic environment and increasing uncertainty. Fuel and energy costs continued to rise as pressure on labor costs.

We also see an impact in consumer spending, all this -- all this as a more direct impact on us. And so, the new lockdowns in China that result in ongoing supply chain constraints, postponing partially the recovery in our cross-border activities.

While monitoring these developments closely, we are implementing measures to mitigate potential impact and adapt our operational structure accordingly. However, we've chosen to absorb the increase in costs where we can, while scaling our operations to align with volume development at Parcels as well as aligning the CapEx investment levels with the volume projections we currently see.

And of course, we closely monitor our market share that has remained stable during the first quarter. Based on our Q1 results, the more challenging economic environment with less visibility on e-commerce developments that we assume to continue throughout the second quarter of the year, we now anticipate more or less flat volume development at Parcels previously 3% to 5% growth.

A further increase in organic costs, including inflationary cost pressure on fuel and labor cost of approximately €50 million, of which the biggest component certainly is fuel related. And we do expect additional impact on cross-border activities of not being able to connect new customers in China and the adversities on the trade line in China to Europe as a consequence of the zero COVID policies of Chinese government.

As a result, we have to adjust our full year 2022 outlook for normalized EBIT to €170 million to €210 million. We can, however, confirm our full year cash flow outlook.

And we'll continue our strict working capital management and scale down investments in part of capacity to adjust to lower volume expectations. So the free cash flow outlook will remain €110 million to €140 million.

Normalized comprehensive income will develop in line with normalized EBIT. Slide 22 indicates the quarterly split of the normalized EBIT over the various quarters of the year.

You know that we've been very transparent in 2020, 2022 on the nonrecurring COVID impact and that we've taken out in this comparison. But obviously, it does still play an important role when comparing the numbers for '21 with '22.

Despite the adjusted outlook, the story is the same as on the 28th of February. This means that we'll basically go back to a normal seasonal pattern in 2022, which basically means a lower result in the first half of the year and then gradually improving margins in Q3 and Q4, also on the back of partially recovery of cross-border and cost savings in Mail in the Netherlands in the second half of the year.

Just to conclude, it's obviously very, very difficult to determine the longer-term consequences of the situation in the Ukraine and what the impact on the macroeconomic drivers will be. There's a lot of independencies and given the fact that we've seen a quarter with 2 months that were in line with expectation and one that wasn't, it's not easy to predict how e-commerce volumes will develop.

At the same time, higher inflationary cost push up cost in the supply chain that we have to absorb as well. And therefore, unfortunate, but driven by those market circumstances, we have to adjust the outlook for the year to €170 million.

We are very positive about our strategy. We'll not waver on the implementation and the pace of execution on that strategic transformation and we're positive about the future prospects for PostNL.

That concludes my presentation on Q1. Thank you all and back to you, Jochem.

Thank you very much, Pim. And I'm handing over to the operator to manage any incoming questions.

Two questions. First of all, on the parcel volumes, could you roughly indicate how much lower March was versus Jan and Feb?

And also maybe the April volumes; are they already -- how do they compare to March? Could you already indicate how these developments look?

And then, secondly, on the CapEx, you've indicated that you're going to adapt in line with the volumes in Parcels. If I'm not mistaken, you indicated with the full year €160 million, €170 million, what could we roughly expect is the €10 million, €20 million adjustment or some words on that, please.

Well, on the January and February saw numbers above and beyond the 11% domestic growth that we saw for the quarter, predominantly in January. Basically, how we look at it is that March was -- expectations.

And bear in mind that January-February were in line with our expectations, roughly speaking, 4 million items of our own expectation. And we do see a continuation of that run rate from March into April.

And if we then talk about the CapEx, then, well, we basically adjusted the CapEx levels at Parcels. Obviously, some commitments have already been made.

And as such, they are not flexible. But you need to think about, roughly speaking, €15 million to €20 million less CapEx for the year in comparison to our original expectations.

My first question is on your outlook for the full year on parcel volumes. So you're now guiding for flattish volumes year-on-year, but clearly you had a pretty soft start of the year.

So can you explain what's your assumption for the second half of the year in terms of parcel volumes? My second question is a bit more generic.

If you could please explain us how the contracts with your logistics partners towards the Netherlands. So you clearly had to -- based on the extra compensation in March, I guess, for higher fuel cost.

But I was wondering if there is also an indexation for higher wage costs as well? And my third question is about your '22 outlook and specifically for the second half of the year.

You're clearly guiding for a step up margin in the second half of the year. But can you please remind us which are the drivers of this higher cost savings in the second half.

So if you could give us a few examples about that.

Thank you. Well, first question relates to the assumptions on full year parcel volumes.

And there, we need to make sure that we start the comparison right. So we -- on a reported level, we projected originally 3% to 5% volume growth in Parcels segment.

We now have brought this back to around zero. If you look at the first quarter, the first quarter on a reported level still shows a growth of 3.9%.

And -- and if we were to go back in the second part of the year to roughly speaking, the growth levels that we saw in January and February, we come back to the almost flattish volume development of parcels for the full year. In other words, what we've assumed, we've assumed a continuation of the run rate of March throughout the entire second quarter and then gradually coming back to the normal patterns in Q3 and Q4.

And what also contributes to that overall development is that clearly, the comparisons on cross-border are very negative in Q1, Q2 whilst international will show significant growth in Q3, Q4 in comparison to those quarters last year. So that is related to the assumptions on volume.

How did the contract with our delivery partners look like? Well, they don't have the same term.

So they're up for renewal on various moments in time. There are mechanisms in place that increases in labor costs or increases in other relevant cost components that are part of the NIA index will cater through to different tariffs for our delivery partners as and when contracts are up for renewal.

What is different, though, is that given the abnormal spike in fuel costs, we felt we need to do something extra and preempt those contract renewals by making sure that our delivery partners can still create a positive margin with their business. And that's why we've given them compensation in the first quarter.

And we expect to continue with that for the higher fuel prices. So that's not necessarily based on contract agreements, but just as we felt it was appropriate to do so.

A big step-up in the cost in the beginning of the year will over time become more productive. Volume in Parcels will grow, as I said, in third quarter and fourth quarter.

And in the Mail side, we will see a step-up in cost savings just as a run rate of initiatives already being undertaken as well as additional cost-saving programs that we'll take. So confident that surely the margins will improve in the second part of the year.

First of all, Pim, I would like to come back on also the parcel volumes and trends. I didn't get exactly what you said regarding January, Feb versus March, April.

Can you maybe remind me a bit on what you indicated as the trend difference of those two? And then, maybe looking to the outlook, also keeping it with parcel volumes.

You reported minus 19.5% and you're indicating flat year-on-year reported. That means that you have to catch up a lot in the second half.

And that actually means that the underlying -- you should go back to sort of double-digit mid-teens sort of trends. Is that indeed what you're expecting to see, well, basically for Q4 because I see the seasonal guidance through the year is not indicating any improvement in Q2, Q3?

And so that means that you put a lot of growth into Q4. Can you maybe help me a bit with understanding your underlying trend you see in Parcels in your outlook, what you assume there?

Then, on the -- on the cost side, you indicated that you have included the extra compensation for fuel also in your outlook. But are you also assuming bigger cost savings in your outlook.

Can you maybe give a bit more indication of on the cost side, what the building blocks are in terms of what you put in there in terms of inflationary pressure and what you put in there in terms of cost savings? And then, on your net working capital, can you give us a bit of an indication of what you expect for the full year there because your receivables came down quite a bit.

Can you give us a bit of an indication on the net working capital trend? And then, my last question for now, at least.

You trimmed your CapEx for this year because you have some underutilization. You see the volume trend being quite a bit lower.

Consumer confidence is lower. The world looks a bit different with higher cost inflation.

What does it mean for your guidance for 2024? Because you alluded to in February still that the €450 million maximum CapEx is still applicable and that we should not assume something hugely different.

But yes, you're scaling down this year the world looks different since end of Feb. Our starting point for next year is lower, inflation, et cetera.

Can you give us a bit more color on the guidance for '24 where the compensation should come from to get there? That's it for now.

On Parcel volume assumption, and be sure to remind me, Marc, if I somehow miss the question. So trend of January and February were significantly growth, the growth months and a significant decline in March.

And as I said, what I said on one of the earlier questions was that, let's say, January and February were in line with our expectations. March was off and off by approximately €4 million in terms of volume.

Roughly speaking, a million a week, and that is currently also the trend line that we have seen in April. Indeed, we do expect in the second part of the year, double-digit growth again, helped by domestic growth, basically going back to the growth levels that we saw in January, February and above and beyond that, also international growth rather than international decline that we see in Q1 and Q2 of the year.

Basically, we've taken the entire second quarter with the run rate of March and April. So roughly speaking, million a week less volume than we originally anticipated.

And then going back to the growth levels because all in all, we still do believe that the key drivers behind growth our GDP growth and online penetration. And even the latest views still indicate real GDP growth in the Netherlands.

I've got no indication that online penetration will come down. So yes, we do indeed expect growth for the second part of the year.

If we were to take the run rate of the quarter and not even assume an improvement there on the second part of the year, you would end up maybe with slightly lower volumes than zero, but still within the bandwidth of the €170 million to €210 million. But as said, we do currently expect the growth to come back to double digit in the second part of the year.

On costs, we have not changed approach to our digital transformation. We execute the plans in accordance with what we wanted to do, which means that we've not introduced additional cost savings and basically absorb currently the higher organic cost that we see driven by -- for the big part, higher fuel costs and a little bit higher labor costs.

There is a lagging effect there. We are not changing our commercial rates at this point in time.

We're not putting surcharges for fuel on our price points, given the fact that in these uncertain times, we want to keep our market share stable. But certainly, through indexation drivers in our commercial contracts, we do expect a step-up in prices from 2022 to 2023 that will higher than in other normal inflation situations would be the case.

That is, I think, the answer on slide, question 3, on the apologies, working capital development that we do expect for the full year to retain a part of the positive development that you've seen in the first quarter. But there's also going to be a bit of phasing.

So we still do expect an investment in working capital of, I would say, round about the €50 million Marc for the full year. On the overall additional CapEx of €450 million that we introduced in summer 2021, Marc, we -- as I said, we've always said that, that additional CapEx in parcels is a function of volume expectations and will not going to be one big investment decision with very many different ones.

And now that we currently see lower volume, albeit in very uncertain times to really predict how long it will take, whether not the composition will change. We've adjusted the CapEx for this year downward with the level that I just said.

But it's too early days to say how that will actually impact '23 and beyond. But certainly, the general comment remains solid.

If we see lower volume growth, the CapEx levels will be adjusted accordingly. If I'm not mistaken and then at least I've covered your five questions.

Absolutely, I might have a follow-up later on.

Apparently, I've got the same -- been. A couple of questions on -- well, first of all, on spring.

If I listened to your story correctly, then the recovery in the fourth quarter is partly due to an expected recovery in domestic parcels and a sharp recovery in international parcels. What makes you so sure -- no, let me rephrase that.

And to what extent is this return to normal? Are we going to see the same kind of volumes for spring coming from Asia as we did in the past?

The second question I had relates to the growth in Belgium. In contrast to what we've seen in the Netherlands, there is an inflation correction an automatic inflation correction in Belgium.

And if I understood it correctly, last Friday, your colleagues from Belgium reported that they have to increase the salaries by 6x 2%. That's 12%.

Is that something you see back in the prices you have to pay to your Belgium subcontractors as well? Is there this same clause as you use in the Netherlands?

Perhaps you can clarify that. And then I'm looking at Slide 17 of the presentation on the share buyback, it says with big letters underneath it, neutralizing the assumed dilutive impact for the dividends over 2021 and 2023.

Now, I've looked at the conversion ratio of your latest dividend, the final dividend over 2021. That was €0.28.

And then the conversion price for share lies at €4.33. I've been doing some quick and dirty calculations.

That means assuming the 40% of the stockholders or the 40% of the shares have opted for the stock dividend. That increased the shares by about €55 million altogether.

Well, for the same amount at today's share price, you can buy back 20.4 million shares as opposed to the 12.7 million shares you issued. How -- my question is, how hard is the €250 million figure?

I can imagine that if things deteriorate if the environment deteriorates rapidly that you can put it on hold and that sort of things. But assuming that nothing special happens, the share price stays where it is €250 million.

Is that still the figure you're coming for this year and the next year?

Yes. And indeed, we have the same cost.

I don't know how it happens. So bear with me, I'll try to properly answer your questions.

On spring, what we -- there's a couple of elements there. We saw really the best ever quarters last year for cross-border in Q1 and Q2.

And those were driven and preempting due to 1st of July changes. We've seen in Q3 and Q4, a slower recovery than we then anticipated, also driven by higher freight cost, which just made Chinese e-commerce parties less competitive in comparison to well, European domestic e-tailors and retailers.

Transit times were up higher and value-added tax and those 3 elements together had done something with the competitive position of these players in the market. At the same time, we do expect also because those comparisons are relatively low, the growth on these trade lines driven by the market share that we have.

What is difficult, though, and that is what I've mentioned as one of the 3 elements that are underpinning the adjustment of the normalized EBIT adjustment is that given the zero COVID policy in China, it's very difficult to, let's say, create new business opportunities at this moment in time. Our staffs are refrained from traveling their scarcity at certain products that limit the opportunity to create an even bigger customer base.

But nevertheless, indeed, for Q3 and Q4, we do expect significant growth predominantly for the trade lines that spring serves. And then, it's really -- you talked about very significant double-digit growth for Q3 and Q4.

If you talk about the delivery partners in Belgium, in Belgium, indeed, via and I don't know -- actually, I don't know their English word for it, but through the parent committees that basically determined the labor conditions salary levels, there are automatic increases on the labor rates. That is true.

And certainly, PostNL will follow the mandatory changes in those adjustments like anybody else in the industry does. The term of these parent committees are not necessarily the same and aligned to the period they referred to B-post.

So all in all, the mechanism works the same. The moment in time when they need to be applied can vary.

And let's finish off by saying that all mandatory expected in location levels are part of this outlook that we've given this morning. Then on share buyback, I've not done the math exactly as you've done it.

But let's be clear, we always said the €250 million was kind of and assumed and how do you say that it intended to compensate the assumed dilutive effect given the dividend policy we have, but we've also been clear that that is fixed. It's two tranches.

So there's no plans whatsoever also not driven by current market situations to change the amount or postpone the second chance. No, none of those whatsoever.

So I still expect us to buyback the full €250 million over the 2 tranches over the 2 years.

So hypothetically, you could buyback far more based on the current share price than…

It's within the ranges of the percentages that we can buyback based on the agreements that we've given -- that were given to us by our shareholders. Yes.

You mentioned that you're making progress with your unions on salary negotiation. But if I'm not mistaken, they were due to have been finalized in October last year.

So effectively does your 1Q result now reflect the expired CLA? Or have you made some allowances for effective higher salary?

And if it doesn't reflect it, is there a risk that there's effectively a catch-up in terms of some back payments for 1Q that hasn't been made? And linked to that, I mean from their releases obviously that they have in the past at that if you can come to an agreement that you think would be forced to take action, whatever that means.

But is it fair to assume that there is the risk of industrial action if you continue the payment? And, lastly, on the Mail update, the Parcel capacity for the overall market.

I mean, where does that stand now relative to last year and the year before if you take yourselves and your peers into consideration. And if there is meaningfully more capacity in the market, is there a risk that you won't be able to pass on your higher cost to your end customers.

Can you please repeat your second question? I've got the first and the last, but I'm not quite sure if I got you right on the second question.

Sorry for that.

That's okay. So from having read some of the unions' releases, they said that they might be forced to take action if you can come to an agreement soon.

I mean does that imply that there is a risk of industrial action?

Okay, understood. We are progressed with the collective labor negotiations.

And we do hope to be able to announce a deal on relatively short notice. But let's say, not all the eyes are dotted and all the elements crossed.

But we're getting very close to an agreement there. That agreement has been -- well, the expected agreement has been taken into account in the outlook range that we shared with you.

The first quarter employee costs related to postal deliveries are still a function of the old CLA and the agreement could have retroactive effect backward towards the beginning of this year. But as said, the costs associated with that are included in the €170 million to €210 million.

Well, as we are close, hopefully, close to concluding a deal there that also mitigates the risk of any industrial actions, I would say. Then, on the market share our ability to pass on additional costs to clients.

What we're seeing is also in the first quarter of the year that market share has been stable around about the 60%, 62%. We are planning to keep it there.

As said, we don't want to introduce outside scope of current agreements that we have now surcharges to pass on fuel cost to clients. But as I said, based on the indexation paragraphs in contracts we have, there is obviously an ability to pass on the higher NEAindex rates from 2023.

And we will seek to be able to do that because, let's say, although we absorbed those costs within 2022, it's not feasible for us to continue to do so forever and ever. And we expect to be able to pass that element on to clients without impacting the market share since I think also our competitors are facing the same cost pressures on the same cost items as we do.

Thank you for the presentation. Just on the normalized comprehensive income on the slide there, you don't have a deep -- number.

Is it fair to assume that it will have a similar impact as the EBIT in your new guidance? Or is there anything else that we should keep in mind?

And then, just kind of going back to the midterm guidance, you talked about CapEx side of it. How are you thinking about volumes and margins guidance there and any kind of update on thinking into 2024?

And then, just following up on the earlier question on the CLAs, is it another CLA this year. If you can just remind us kind of what is the timing on that and where you are on that, please.

On the normalized comprehensive income, that indeed will follow the relative step-down of the normalized EBIT levels, basically taking 3/4 of that step down is roughly the assessment that you need to make to get to the impact on normalized net comprehensive income. I do understand your question on guidance going forward.

But that's very, very difficult at this moment in time. So for us, it's too early days to say that.

We basically saw March being completely different than January, February. It's not easy yet to split out what the drivers behind that step down in volume in March-April, is it well consumers temporarily withholding consumer spending?

Is it also temporarily a shift to services, a welcome product that will over time come back? How much is driven by caution of end consumers given higher inflationary elements.

So it is not easy to predict at this point in time, and that's also why currently, we will refrain on giving more insight on guidance just because we can't at this point in time beyond the 2022 orders. On the CLA, you're right, on the PostNL collective labor agreement, so not the one covering the Mail deliverers -- those that contract terminates by -- if I'm not instating, 1st of October of this year.

And as such, negotiations have not started yet, but are planned for the second part of the -- second part of the year.

Just a follow-up; do you assume anything on that CLA in the new guidance?

Sorry. Can you repeat the question?

Yes. Does the new guidance -- what do you assume in the new guidance for that CLA in the first quarter?

I'm not going to preempt that negotiation. But let's say, our best estimate is included in the outlook, but I cannot be more specific.

I'm sure you understand, given the fact that negotiations on that CLA still need to start.

So many questions already answered. So I will keep it short.

One question still regarding the fuel costs. So just to be clear, assuming that fuel prices will remain at these levels, elevated levels.

What would that mean for your €50 million that you assumed in your adjusted assumptions for the year? Then, another question that I have is more a general question.

So obviously and clearly, your guidance assumes somewhat a normalization into H2. But what if, say, inflation keeps hampering consumer confidence and volumes.

Do you have a contingency plan in place for this scenario? Or are you taking more a wait-and-see approach given all the uncertainty in the outlook?

Thank you. On fuel prices, what we've assumed for the remainder of the year is roughly speaking, somewhere around €12 million to €14 million additional costs in comparison to our first indications in the beginning of the year, driven by higher fuel costs for the remaining quarters of the year.

We do expect a gradual but not fundamental improvement of the diesel fuel prices throughout the months of the year, but still at very high levels on average for the entire year. That is what we've currently assumed and currently have included in the outlook.

A consumer price, including value-added tax of on average around 190-195 a liter, is what we've assumed. And is there any contingency in place if volume comes down further?

Well, what we do is, as I said, let's say, we've scaled down our operations on the back of lower volumes. There is obviously a bit of time lag between the moment that you see those lower volumes and at the time you need to adjust your logistical footprint on.

So that's what we're doing. We're scaling that down slightly lower to lower levels than our volume expectation.

And that's our way to mitigate this partially because it's easier to scale up than scale down. So that's our way to manage the uncertainty and we'll follow on daily and weekly the volume development.

And if we do see fundamental changes in comparison to our expectations, we'll take action like we take action each every time we're put into challenging circumstances. So that's the way we look at it.

We think it would be a mistake not to continue with our strategic transformation and that's why we're not making any amendments to our strategy nor to our digital and transformation programs because we ultimately truly believe that those elements will create distinctive customer experience and will further strengthen PostNL's market position in comparison to our main competitors. So we do not plan to deviate from those at all.

Thank you very much, operator, and thank you all for joining us today. If you have any further or remaining questions, you know where to find the IR team.

We look forward to meeting you again and have a good day. Thank you.